Chinese EV makers Geely, Chery take over empty European auto factories - Rest of World

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By Indranil Ghosh

1 July 2026

Chinese EV giants like BYD and Chery are moving directly into Europe’s idle auto factories.<br>Building locally skips EU tariffs that run as high as 35% on China-made EVs.<br>Chinese brands sold 285,000 cars in Europe in the first quarter, up 88% from a year ago.

China’s EV makers, squeezed at home, are moving into Europe’s idle car factories.

Chery will start building EVs later this year at a former Nissan plant in Barcelona, Spain. It is also in talks to have its cars built at Nissan’s Sunderland, England, factory. Geely is reportedly taking over an idle hall at Ford’s plant near Valencia in Spain, and BYDiBYDBYD Auto is a Chinese carmaker that became the world’s leading EV manufacturer in 2023, competing with Tesla for market share and global attention.READ MORE is said to be eyeing half of a Volkswagen plant in Dresden, Germany.

For years, the world’s established carmakers built in China to sell locally. Now their Chinese rivals have turned the tables, producing in Europe to skirt the tariffs on cars shipped from China and sell at competitive prices.

The challenge for European carmakers like Volkswagen, Ford, and Nissan is whether they can hold their ground against Chinese companies, which make more than half the world’s EVs and are bringing the fight to Europe.

“This is not just about filling idle capacity, it’s about embedding themselves into the European industrial ecosystem,” Bill Russo, founder of the Shanghai-based advisory firm Automobility, told Rest of World. “The winners will treat it that way.”

Chinese EVs attract a 10% import duty in the EU. There is also an extra 17% anti-subsidy tariff, part of a set of levies the EU placed in 2024 that reach as high as 35.3%. Building inside Europe avoids these altogether.

Chinese brands sold 285,000 cars in Europe in the first quarter of this year, up 88% from a year earlier, lifting their market share to more than 8% from 4.5%, according to Felipe Munoz, founder of research platform Car Industry Analysis. Their sales are climbing faster in mature markets like Europe than in the developing economies, he said.

Nissan’s Sunderland plant<br>Nissan

Empty European factories

The factories changing hands are more starving than shutting.

Volkswagen will cut annual German production by 734,000 cars over the next four years. Ford and Nissan have trimmed output at plants in Cologne and Sunderland as fewer buyers want combustion models, and their electric models lose money.

Walking into a working plant is quicker and cheaper than building one, because the buildings, power, and trained workers are already there. The Sunderland talks would see Nissan keep the plant and build Chery’s cars under contract on a freed-up line. For Nissan, whose European sales have slid and whose finances are stretched, the deal is a stopgap.

“This is an important step forward for our operations,” Massimiliano Messina, chairperson of Nissan’s Africa, Middle East, India, Europe, and Oceania region, told Rest of World. “We are looking forward to working with Chery International U.K. in the coming months to finalise a position that is optimal for both companies.”

The boldest of these factory deals would be in Germany. If confirmed, it would give BYD half of Volkswagen’s plant in Dresden, a glass-walled showpiece where buyers once watched their cars being built through the windows. That would set the world’s biggest EV maker at the heart of Europe’s largest car industry.

What European carmakers lose

The big danger for Europe’s carmakers is what they surrender by handing over their plants, said Babak Hafezi, founder of consultancy firm HafeziCapital. A Chinese maker that wins European factories also wins local jobs, suppliers, and the everyday acceptance of being built down the road, while the Western host grows reliant on the technology its tenant controls.

The greatest risk is that European and Western automakers become dependent on Chinese platforms."Babak Hafezi, founder of consultancy firm HafeziCapital

“The greatest risk is not that Chinese automakers buy European factories, given that factories are replaceable assets,” Hafezi told Rest of World. “The greatest risk is that European and Western automakers become dependent on Chinese platforms, software, batteries, and vehicle architecture while Chinese firms simultaneously gain local production, local labor, local suppliers, and local consumer legitimacy.”

That dependence could set in within a few years, as cars built and badged in Europe stop being treated as foreign. Resistance softens once the jobs are local and the headlines call them European-built Chinese brands, Hafezi said.

Not everyone views the takeovers as a slow surrender. The overseas push is the next stage for companies that have outgrown their home market and now build where they sell, Lei Xing, founder of Chinese auto...